On receipt of permit to compute the tax on TTB Form 5110.51, the revenue agent shall:
(a) In the case of spirits in packages, prepare a gauge record as provided in Sec. 26.164a in quadruplicate, compute the tax thereon, and attach all copies of the gauge record to TTB Form 5110.51;
(b) In the instance of spirits in cases, verify by inspection the quantity of spirits described on the form; or
(c) In the case of spirits in a bulk conveyance, verify by gauge or inspection the quantity of spirits described on the form. If the revenue agent determines any variation between his gauge and the quantity of spirits described on Form 5110.51, he shall amend and initial the data in part I of the form. The revenue agent shall deliver all copies of Form 5110.51 and any accompanying package gauge record to the proprietor. The proprietor shall then compute and enter the amount of tax on all copies of Form 5110.51. (Approved by the Office of Management and Budget under control number 1512-0250) [T.D. ATF-198, 50 FR 8549, Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001] Sec. 26.79a Computation of effective tax rate.
(a) The proprietor shall compute the effective tax rate for distilled spirits containing eligible wine or eligible flavors as the ratio of the numerator and denominator as follows:
(1) the numerator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product (exclusive of distilled spirits derived from eligible flavors), multiplied by the tax rate prescribed by 26 U.S.C. 5001;
(ii) The wine gallons of each eligible wine used in the product, multiplied by the tax rate prescribed by 26 U.S.C. 5041(b) (1), (2), or (3), as applicable; and
(iii) The proof gallons of all distilled spirits derived from eligible flavors used in the product, multiplied by the tax rate prescribed by 26 U.S.C. 5001, but only to the extent that such distilled spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2) of this section.
(2) The denominator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product, including distilled spirits derived from eligible flavors; and
(ii) The wine gallons of each eligible wine used in the product, multiplied by twice the percentage of alcohol by volume of each, divided by 100.
(b) In determining the effective tax rate, quantities of distilled spirits, eligible wine, and eligible flavors will be expressed to the nearest tenth of a proof gallon. The effective tax rate may be rounded to as many decimal places as the proprietor deems appropriate, provided that, such rate is expressed no less exactly than the rate rounded to the nearest whole cent, and the effective tax rates for all products will be consistently expressed to the same number of decimal places. In such case, if the number is less than five it will be dropped; if it is five or over, a unit will be added.
(c) The following is an example of the use of the formula.---------------------------------------------------------------------------
\1\ Proof gallons by which distilled spirits derived from eligible flavors exceed 2\1/2\% of the total proof gallons in the batch (100.9 - (2\1/2\%) x 3.371.8 = 16.6).
Batch RecordDistilled spirits......................... 2249.1 proof gallons.Eligible wine (14% alcohol by volume)..... 2265.0 wine gallonsEligible wine (19% alcohol by volume)..... 1020.0 wine gallonsEligible flavors.......................... 100.9 proof gallons
[GRAPHIC] [TIFF OMITTED] TC05OC91.041
(Approved by the Office of Management and Budget under control number 1512-0203) (Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010)) [T.D. ATF-297, 55 FR 18066, Apr. 30, 1990, as amended by T.D. ATF-307, 55 FR 52741, Dec. 21, 1990]